Lord Burnham: My Lords, with reasonable luck, the debate will not last so long as the debate to which we have recently listened. I am happy to see a genuine manuscript amendment. We on these Benches are entirely content for the case which the Minister has made for the order. I am happy to support it.

The Viscount of Falkland: My Lords, on behalf of my noble friend Lady Hamwee, who is unable to be here tonight, I thank the Minister. Will she convey to her noble friend Lady Hayman my noble friend's thanks for the courtesy of the letter which she wrote? My noble friend, on behalf of these Benches, is happy with the action which the Government have taken.

Baroness Farrington of Ribbleton: My Lords, I am delighted with the responses of both noble Lords.

On Question, Motion agreed to.

Lord Hoyle: My Lords, I beg to move that the House do now adjourn during pleasure until 9.25 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.32 to 9.25 p.m.]

12 Mar 1998 : Column 382

European Communities (Amendment) Bill

House again in Committee on Clause 1.

Lord Shore of Stepney moved Amendment No. 3:

Page 1, line 12, at end insert--
("( ) Article 1, other than paragraph 12 (Title VIa of the Treaty on European Union (provisions on closer cooperation)),").

The noble Lord said: I am more than slightly embarrassed at appearing again on the Floor of this Chamber after one or two earlier occasions on this very day. But this is the next amendment in order and it is extremely important, and I move it formally now.

It would have been much better had this group of amendments been taken on another day because at this time of night on a Thursday, the Committee is inevitably rather sparse in its attendance and, of course, noble Lords had no intimation until one o'clock today that these amendments were to be debated today. I feel that if they had had that intimation and had had that knowledge, the Committee would be much better attended, even though it is a late hour.

Why do I say that? I say that because these amendments that I am moving and the articles in the treaty to which they refer have two, or perhaps three, aspects. The first is their technical nature, which raises questions which I shall seek to explore further, and I hope that the Minister will be able to enlighten us about that.

Secondly, the amendments raise the whole question of the future development of the European Union and, in particular, whether it is possible to find a modus vivendi between different groups of states, some of which wish, in certain areas, to go into a much closer union than others.

If that could be worked out satisfactorily and explored fully, we may find a solution to many of the difficulties that we have experienced as a country under different governments in our dealings with the European Union and previously the European Community.

First, I turn to the rather technical aspects. The basic article is Article K.15 in the Treaty of Amsterdam. Indeed, it comes under the heading of "Provisions on closer cooperation". It clearly allows for states, provided that there is at least a majority of member states, to go forward into closer co-operation than exists in the present treaties; indeed, it allows them to go beyond that. The article lays down certain conditions which, on the face of it, are welcome and acceptable. There are several paragraphs under the article. Paragraph (f) makes the proviso that that process should,

"not affect the competencies, rights, obligations and interests of those Member States which do not participate therein".

That is to say: if they do go ahead, they must not do so in such a way as to inflict disadvantage and damage upon those member states which do not choose to go with them. That seems to me to be a very important safeguard.

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The article also allows for states which do not wish to go ahead into closer co-operation at a particular time, to do so at a later stage if they so decide. Under paragraph (g) it says that it,

"is open to all Member States and allows them to become parties to the cooperation at any time, provided that they comply with the basic decision".

They seem to me to be quite important safeguards; and, to that extent, I welcome them.

I turn now to the very important question of the voting procedures. Those procedures applying to closer co-operation, which are quite fundamental, are to be found in Article K.12 of the treaty. Oddly enough, that precedes the major section defining what closer co-operation is all about. It says that closer co-operation could go ahead, so to speak, provided that the Council has acted by a qualified majority vote; the Commission has presented an opinion; and, for what it is worth, the request has also been,

"forwarded to the European Parliament".

So the Community institutions will have had a chance to consider the matter and, presumably, to deliver their opinion.

The article then goes on to say--and this is very important--that it is not just decided by qualified majority vote. If it were, it would be totally unacceptable and, in my view, would be rejected out of hand. The second paragraph of Article K.12 (2) says:

"If a member of the Council declares that, for important and stated reasons of national policy, it intends to oppose the granting of an authorisation by qualified majority, a vote shall not be taken".

Again, that is certainly helpful. It then goes on to say:

"The Council may, acting by a qualified majority, request that the matter be referred to the European Council for decision by unanimity".

That is the most important group of words; namely, that,

"the matter be referred to the European Council for decision by unanimity".

Presumably, any state which feared that it was being disadvantaged or damaged in some way by other states going forward into closer co-operation would know that it could exercise a veto and prevent that happening. However, as I said, it would have to put a case forward within which serious national interests would have to be stated and it would have to bring its case to the European Council. I find that not unacceptable. I think I have interpreted correctly the clauses relating to closer co-operation. I hope that my noble friend the Minister will tell me whether I have it wrong in any way or confirm that I have it right.

So much for the technical side of it. K.15 and K.16 raise the prospect of a majority of countries moving ahead into closer co-operation while others do not. I should have thought that raises the whole question of the future of the European Union and the question of whether the different aims and aspirations of countries within the European Union can be accommodated without, as it were, inflicting damage upon a minority, or a minority inflicting damage on the majority--depending on which way you look at it--by holding everything up. In other words, the measure offers the possibility not just of a two speed or a multi-speed

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Europe but of genuine flexibility. It offers the possibility that some nations which agree on some matters of collective importance will go forward and use the treaty machinery and institutions--as the clause allows them to do--while others who do not want to do that are under no obligation to join in.

When you look at the sheer complexity of the European Union as it now is--it is bound to become even more so, particularly when one considers the first and second tranche of candidate countries--the differences of background, history, tradition, institutions, people and languages are so enormous that it is almost impossible to envisage the whole thing working uniformly across the Continent. If one reaches that point in one's examination of the present situation and the reality of the Community and of national life within it, surely it is possible to begin to work towards what I mentioned earlier; namely, a modus vivendi which can be accepted by all members of the European Union.

It is relevant to accept that there are serious differences in goals and intent. We all know that some countries-- I suppose this was strongest in the original Six who signed the Rome Treaty--wish to progress to a much deeper integration than the rest. They wish to do that for a number of understandable reasons which I certainly do not despise and have never wished to frustrate. The most recent common experience of the Six was defeat, occupation, liberation and destruction in the Second World War. The fires of war visited those countries not once in defeat but secondly in liberation. The damage and destruction were virtually beyond belief. Before that vivid experience of 50 years ago--not that long ago--there was the earlier massive conflict of the First World War. In the case of the two central nations in this European Six--France and Germany--there was rivalry, hostility and war going back to 1870 and beyond. Therefore it is perfectly understandable that there should have been a strong desire in that Six--which is stronger than in any other state--to come together to be as certain as possible that war would no longer be a possibility between the member states of that original Six.

It is interesting to look back on its history. The first initiative was the European Coal and Steel Community--a rather old fashioned view, as we now see it--when the sinews of war were considered to be coal and steel as they were in the First and Second World Wars. By uniting the European coal and steel industries the individual countries would be deprived of the essential sinews of war. It would come under a collective High Authority. That was the beginning.

Since then there have been many other projects. Some were abandoned, like the European Defence Community with multinational troops down to platoon or company level. That was all part of the integration. Behind all that, giving this tremendous drive and force, was German guilt and French fear. Those were the two dominating emotions and forces in the ever closer European Union construction. It was interfered with for a period on the part of France by General de Gaulle. He asserted with great self-confidence the national independence of France. But it was abandoned again the moment the Berlin Wall came down, and the two Germanies reunited, when France

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faced 80 million Germans again on the frontier. National independence, or a Europe of sovereign states, was abandoned by Mitterrand and he entered into the great leap forward of the Maastricht Treaty in the belief that, roped down with a thousand regulations, a single currency and a common monetary policy, it would be impossible for Germany to assert itself independently of its neighbours.

That is fully understandable. Those countries which were occupied and then liberated had seen their state power smashed, and the rule of law of their own countries completely discarded, overturned and torn up. That has not been the experience of this country. We may have been fortunate, lucky and blessed in our history, but we have not seen our state power smashed and overruled. We have not suffered the appalling losses and indignities of being occupied by an enemy power.

I believe that that lies as much at the root of the British approach to Europe as anything else. We are prepared to co-operate. We are prepared to go a very long way. But from our own historic experience, and the will of our people, we do not feel that we need to enter into such an intimacy of relationship that we abandon self-government and the powers of our own democracy.

I turn to the clause. All that I have said is relevant to it, and to the future of the European Union. The first obvious point is this. With the best will in the world, the British have tripped over the rest of the European Union and found themselves in conflict not just over the Amsterdam Treaty but the Maastricht Treaty too. What is an opt-out, in a sense, but the acceptance by the majority that it can go forward into a closer arrangement but not carrying the country which has an opt-out? The Danes, the Swedes and the Finns also share with us the desire not to go forward in this way. Let us imagine trying to apply to the East European applicant countries the disciplines of a single currency and a European central bank. We know that it is a nonsense.

We have quite considerable opt-outs. We opted out of Schengen. We believe that our borders are to be patrolled by our own people and are not simply to be part of a European open frontier system. We opted out crucially on the single currency and monetary union. Those are precursors, in a way, of these clauses and of this policy, this treaty prospect of closer co-operation, differentially applied to the member states of the European Union.

I see a great possibility here. It has been the failure to be honest with ourselves and with our European partners that has led us into such difficulties and so much bad will. It started under the previous government, with the then Prime Minister, Mr. Major, talking about "Britain at the heart of Europe"; and our own Prime Minister, Mr. Blair, is talking now about "leading Europe". If you accept that there are differences of historical experience and of objective, you cannot start, as it were, posturing as the leader when you know that the majority of the states want to go further, and in a different direction, than we do. The majority of European Union countries actually want a federal Europe. They want it--and good luck to them. Indeed, I wholly understand, and I shall never advocate

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standing in their way. But it is not right for us. It is not consistent with our history and it is not going to be our destiny.

So this clause is of immense importance. If we can only manage to talk frankly, openly and honestly with ourselves and say that their objective is a federal state but ours is not--if we could only do that--we could have a much happier, more fruitful relationship with our European neighbours than we have had so far.

If anyone is worried and is thinking: "Oh dear, there is a great European state across the Channel, and here are we, a rather smaller nation state on the other side", let them reflect for just a moment on another English-speaking nation which lives with a similar experience in prosperity, peace and general good will. I refer to Canada, living cheek by jowl with the superpower, the United States--managing its own affairs, having its own currency and its own central bank, making its own laws, and enjoying the good will and close co-operation of its neighbour. Let that be a model for us, too.

9.45 p.m.

Lord Bruce of Donington: I wish to refer to Amendment No. 3, so ably moved by my noble friend Lord Shore of Stepney. It refers specifically to,

"paragraph 12 Title VIa of the Treaty on European Union (provisions on closer cooperation)".

I have before me Article K.15 as reproduced quite faithfully in the Treaty of Amsterdam. It states:

"Member states which intend to establish closer cooperation between themselves may make use of the institutions, procedures and mechanisms laid down by this Treaty and the Treaty establishing the European Community, provided that the cooperation:

(a) is aimed at furthering the objectives of the Union and at protecting and serving its interests".

My first question is: who determines whether it is aimed at furthering the objectives of the union and protecting and servicing its interests? Who defines that?

In the Treaty of Rome, in a section that is so far not repealed, it states that the European Commission:

"is in itself the authority for the interpretation of the treaty".

What it really means is this: The European Commission is satisfied that it is aimed at furthering the objectives of the Union and at protecting and serving its interests. Through the Treaty of Rome, similarly, it is the Commission, under Article K.15(b) of the Treaty of Amsterdam, that determines whether the co-operation:

"respects the principles of the said Treaties and the single institutional framework of the Union".

So again it is the Commission that has to be satisfied and to certify that the co-operation:

"(c) is only used as a last resort, where the objectives of the said Treaties could not be attained by applying the relevant procedures laid down therein".

There is no democratic determination; it is determined by the Commission. As noble Lords are well aware from the previous observations I ventured to make to the Committee, the Commission is responsible to no one but itself. It is not elected, it is accountable to no one.

Paragraph (d) states that it:

"concerns at least a majority of Member States".

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Even I am willing to concede the power of the Commission to determine the simple mathematical problem that it concerns a majority of member states. Then it is the Commission that has to be satisfied that it:

"does not affect the 'acquis communautaire' and the measures adopted under the other provisions of the said Treaties ... [It] does not affect the competences, rights, obligations and interests of those Member States which do not participate therein".

That is similar to paragraph (g) and all the rest.

The whole operation of the closer co-operation and how it may be applied is not decided by any elected body. It is decided by an unelected body--the bureaucracy which is enshrined in the Commission itself. The Commission's word is final in these matters. It is not open to objection by the Council of Ministers, it is not even open to objection by the European Council. It is the Commission itself--an unelected, non-accountable body--that makes the crucial decision as to whether certain members who want to follow a certain course of action outside the normal ambit of the treaties are permitted to make use of its facilities to do so.

Perhaps Members of the Committee and Her Majesty's Government are quite willing to accede to this procedure on the fiat of the Commission. I repeat that under the Treaty of Rome--let the Front Bench deny this--it is the Commission that is responsible for the interpretation of the treaties. It is responsible for that under the Treaty of Rome in an unamended section. If it suits Her Majesty's Government, who represent the United Kingdom, that such co-operation outside the normal ambit of the Treaty of Rome is to take place independently on the say-so of the Commission, they are welcome to take that view. For my part, I believe it is incompatible with our position as a sovereign state with a due right under the treaties to its own views and opinions without being "at the heart of Europe". Nothing can take that away.

It is allied to an even more important question which arises from the operation of another section of the treaty which is of unique importance in this regard. It may well be--and I willingly concede it--that a member state, perhaps even the United Kingdom in its moment of independence, would take the matter to the European Court. It is entitled to do so. What happens? Article K.7, paragraph 6 reads as follows:

"The Court of Justice shall have jurisdiction to review the legality of framework decisions and decisions in actions brought by a Member State or the Commission on grounds of lack of competence, infringement of an essential procedural requirement, infringement of this Treaty or of any rule of law relating to its application, or misuse of powers. The proceedings provided for in this paragraph shall be instituted within two months of the publication of the measure".

In the event of any appeal, any objection or any action in dissent, or even in assent, of proposals contained in the original article to which I referred, goes to the Court of Justice. That article should be read in conjunction with Article K.6, which states:

"The Council shall take measures and promote cooperation, using the appropriate form and procedures as set out in this Title, contributing to the pursuit of the objectives of the Union. To that end, acting unanimously on the initiative of any Member State or of the Commission, the Council may: (a) adopt common positions defining the approach of the Union to a particular matter; (b) adopt framework decisions for the purpose of approximation of the laws and regulations of the Member States. Framework decisions shall be binding upon the

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Member States as to the result to be achieved but shall leave to the national authorities the choice of form and methods. They shall not entail direct effect".

At sub-paragraph (d) it states:

"establish conventions which it shall recommend to the Member States for adoption in accordance with their respective constitutional requirements. Member States shall begin the procedures applicable within a time limit to be set by the Council. Unless they provide otherwise, conventions shall, once adopted by at least half of the Member States, enter into force for those Member States. Measures implementing conventions shall be adopted within the Council by a majority of two-thirds of the Contracting Parties".

Let us look at those two articles taken together. Let us say that there is a challenge by a member state--or even by the Commission itself--arising from the application of the article to which I referred and the matter goes to the European Court of Justice. That raises important considerations. It raises the consideration as to what is the force behind Article K.7(6), which gives the court full powers. I want to know from Her Majesty's Government how far the Court of Justice rules shall override our own decisions in these matters. It raises matters of grave constitutional importance.

For example, in this country we have a rule--the noble and learned Lord, Lord Hailsham, is unfortunately absent through illness and I wish he was here; indeed, I wish him a happy recovery, as I am sure do all Members of the Committee--which the noble and learned Lord, speaking in his capacity as the then Lord Chancellor, put to the House when he said that no Parliament can bind its successors; no Parliament can pre-empt the right of its successors to change. Does that rule still exist? Under Article K.7(6) it would appear otherwise. Will my noble friend who is to reply give me the Government's opinion as to the validity of Article K.7(6)? Carried to its logical conclusion, that would postulate that the Court of Justice can prevent any action taken by a future government to, for example, opt out of the European Community altogether. Will my noble friend give me his opinion on that? Does Article K.7(6) override our constitution? That is the vital question involved, and it is one of which this incidence in connection with the article contained in the amendment is a mere small example. Perhaps in due course we can have an observation from my noble friend, if necessary with advice, whether the doctrine that a succeeding parliament can override what has been decided before still applies. For example, will a parliament elected in 2002 still have the right to overturn a decision reached by the previous parliament? That is the fundamental question involved. I invite my noble friend to reply in due course.

10 p.m.

Lord Pearson of Rannoch: I thank the noble Lord, Lord Shore, for introducing this amendment (to which my name has been added) in such a deep, probing and thoughtful way. When he talked about the understandable inspiration of the original Six to want to set up the original European Common Market, which has grown into the animal we see before us today, he was right to say that the two main inspirations for that initiative were the fear that Germany might go to war with France yet again and the wish to create a bloc to stand up against the growing power of the Soviet Union. My trouble is that I think those

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fears are both truly redundant nowadays. If there is one question I would wish to put to Herr Kohl, who I am sure is in good faith when he fears that the German nation might go to war again--I of course disagree with him completely--it is this: when did a bourgeois democratic nation ever provoke a war? I believe that the answer is, historically, never. I cannot see any possibility of it happening again with a democratic nation in Europe.

Then this question of closer co-operation raises the possibility of new members for the European Union, about which we hear so much. Indeed, both our main political parties and many people in Europe regard the expansion of the European Union to include the former communist countries of eastern Europe as the number one priority. But for that it is generally acknowledged that we must achieve reform of the common agricultural policy, and that, in turn, would require 62 out of the 87 votes to achieve it. The last time I looked at the subject, there were 54 votes ranged against reform of the common agriculture policy; and so I should very much like the Minister, when he comes to reply, to say whether there has been any progress in that matter, and whether Germany perhaps now supports reform of the common agriculture policy.

Not only do we require reform of the common agriculture policy but we require reform of the structural and cohesion funds. I understand that one black ball from the recipients of those funds would exclude any reform of them. So, unless the Minister can enlighten the Committee otherwise, it seems to me that the question of enlargement is almost certainly a pipe dream.

Are we at all sure that the former communist countries of eastern Europe really do want to be members of the European Union? I have been able to discuss this question with some of their governments recently and I have found no genuine enthusiasm for full membership. They all seem to want access to the market and defence through NATO. Access to the market is not being made exactly easy for them and, generally speaking, they are frustrated by the EU's famous bureaucracy, although they are very fond of the handouts which they receive from Brussels while they are queuing for membership.

Be that as it may, I cast a note of caution on these new flexibility provisions in the Amsterdam treaty, which appear to be something of a victory for the federalists. I say that because previously any new initiatives or changes to the EU's organisation had to be agreed unanimously. If some countries wished to integrate more deeply in any new area, they needed everyone to agree that they could use the institutions and mechanisms of the treaty to do so. An example of that was when the United Kingdom agreed the Maastricht protocol on social policy, which allowed the other 11 nations to go ahead with the social chapter using the Community's institutions for which the UK continued to pay its share.

But instead the UK could have vetoed the policy. The others would then have had to set up separate mechanisms, use separate buildings, separate bureaucrats, chauffeurs, translators and all the rest, if they were really so keen on it that they wanted to go ahead in those circumstances. Likewise, we could have vetoed the whole economic and monetary union policy at

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Maastricht. Many of us believe that that is exactly what we should have done. Apart from anything else, it would have saved us a considerable debate this afternoon.

In those circumstances our previous government were beginning to suggest that we might withhold our veto on future projects of closer integration which the others wished to pursue, but only in return for a repatriation of some powers to the United Kingdom. So instead of the ever-closer union of the people of Europe--that guiding principle of the treaty and of the court--we had started to think of a Europe where powers would pass up and down between Brussels and the national parliaments; hence the expression "variable geometry", a leading proponent of which was my right honourable friend Mr. Michael Howard in the previous government. But as that geometry contained a potential minus sign it was not very popular with those who wished to pursue a single European superstate. So, as I understand it, that is why the veto was so weakened at Amsterdam--it removed the bargaining chip of those who wished to depart from the ever-closer union of the people of Europe.

Until I heard the very powerful opening speech on this amendment by the noble Lord, Lord Shore, I had thought that the veto had been removed more completely than he indicated. So I join him in waiting to hear the Minister's interpretation of this matter and whether agrees with the interpretation of his noble friend Lord Bruce of Donington to the effect that the Commission remains in charge--as, under the Treaty of Rome, it usually does. In other words, if the acquis communautaire is in no way impaired by these changes to the treaty, these new clauses are very far from welcome.